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Current world total production is about 87.5 million barrels per day (mbpd) of which around 72 mbpd is “conventional” – the rest includes tarsand oil, deep offshore, coal-based and gas-based synthetic oil, the biofuels, and other sources.

Atmospheric CO2 -- from the combustion of fossil fuels in major part -- increased from around 280 parts per million in the 19thC to 380 parts per million today.

About 35% of carbon dioxide emissions are absorbed by oceans, which causes rising problems for marine organisms.

Dissolved in ocean water, CO2 forms carbonic acid by stripping out carbonate ions, and less is available for their shells, skeletons and exoskeletons.

This has a major impact on the life expectation of many fish and marine species, further reducing fish catch potentials in coming decades.

ALARM CALL FROM SCIENCE

CSIRO, Australia (2006) : Increasing levels of greenhouse gas emissions will lead to large impacts on many climate-affected systems – including more frequent water shortages in Australia – that may be very difficult to adapt to in the decades to com

Pacific Institute, USA (2007) : Water resources worldwide are threatened by climate change, misuse, and pollution. But there are solutions: we can provide for people's basic needs and protect the environment by using innovative water efficiency and conservation strategies, community-scale projects, smart economics, and new technology

The International Water Management Institute’s five-year study on water and agriculture concludes that urgent and substantial reforms are needed, in part due to climate change accelerating the current situation, making it worse. The UN’s Panel on Climate Change (IPCC) reports that if global average temperature rises by 3 degC, hundreds of millions of people will be exposed to increased water stress. Climate change and Peak Oil are the wake-up call we all need to start acting on Water. (IWMI report Jan 08).

UNESCO and UNEP forecast that the number of people living in Water-stressed countries will climb from 470 million to 3 billion by 2025 unless radical measures including massive Investment in Water are not implemented

Present and increasing water supply shortage and rising water costs are now a major factor driving the price of Agro-commodities upwards, and further reducing World Food Stocks.

In 2006 The World Business Council on Sustainable Development, made this summary:

"Global water usage has increased six fold in the past 100 years and will double again by 2050, driven mainly by irrigation, other agriculture and urbanisation, especially in Asia.

Some countries have already run out of water to produce their own food.

Without improvements ... the consequences will be even more widespread water scarcity and rapidly increasing water prices,"

WORLD FOOD GRAIN STOCKS

– DAYS AVERAGE DEMAND

Sold as ‘spring fresh’. bottled water retails at about 1000 dollars per ton

FAO’s reports to the UN World Water Day, 22 March 2007, highlight that:

Agriculture accounts for about 75 percent of all freshwater withdrawn from lakes, waterways and aquifers, and rises to around 95 percent in several developing countries, where roughly 75% of the world’s irrigated lands are located. Food is water. It takes at least 1 000 litres of water to produce one kilogram of wheat, rice or maize, and 13 000 to 15 000 litres to produce the same quantity of feedlot grain-fed beef.

Without water we cannot produce food; and no substitute for water exists, unlike oil. .

Source: World Bank 2007

More efficient, water-conserving Food producer companies will be favoured as water cost and shortage drive Food prices higher. Company strategies targeting lower cost water supply for Food production will be of increasing interest to Stock analysts, and Investors

In a recent report, the UN Food and Agriculture Organisation drew attention to the rising threat of higher food prices due to Biofuels production – this in turn will also increase Water supply shortages

Throughout the Asia-Pacific region economic growth, urbanisation, climate change, rising energy prices and decades of under-investment are intensifying water pollution and water shortages, leading to increasing recognition that Water is a key natural resource

Portfolio volatility will be minimized and contained, at a maximum of 15% on a Quarterly basis.

Correlation:

Stocks, depending on Equity class: 0.33 - 0.5

Fixed Income (Govt and Treasury instruments): Under 0.33

Portfolio Construction: Equities

Weighting, as for other PCM SI Funds will be optimized through our research based process comprising macro- and microeconomic analysis of Large and Mid Cap Asia-Pacific regional Water-dominant companies, taking account of PPP corrections in market capitalization and market growth weighting.

These Asset Classes will seek high return in the first case, and long-term non-volatile performance in the second, this latter including creation and issuance of “water-linked bonds”, as well as purchase of existing Water or Water-dominant Securities